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Sunday, May 29, 2011

Energy Lies

"Obama is Blocking Oil Drilling"~ There's a lot of political horsepuckey stinking up discussions about energy nowadays. Rhetorical hyperbole is the norm for the election season, now fully underway, but energy is a critical subject. Much of it must be called for what it is—lies.

For example, over-heated indignation in some quarters of Congress asserts that US oil production is in decline, and it's—you know!—all President Obama's fault because he is "blocking" domestic oil drilling. And if Obama would just get the gummint out of the way, both more oil and its wondrous benefits to the economy, the American Way, etc. would flow forth. Good rabble-stirring rhetoric, but reality—not.

US domestic oil production is indeed declining. It has been since 1970 when we reached Hubbert's Peak domestically. It's been almost all downhill since, exactly as predicted, and the result to be expected any time one systematically depletes a finite resource.

The overall 40-year-and-counting decline in US oil production cannot, obviously, be blamed on Obama. Nor can it be blamed on any president of either political party; it is geology and technology, not policy or politics that is responsible for the decline in domestic oil drilling and production.

Furthermore, while it may prove just a temporary perturbation, there is an obvious uptick on the chart above, and, in fact, domestic oil output in 2010 was the highest since 2003. Despite the moratorium in the Gulf of Mexico. Despite real concern and prudent caution about fracking, oil shale, tar sands and the rest of the "unconventional" oil production methods.

Notwithstanding Obama's fairly small and short-lived nods towards worker safety and environmental safeguards in the oil patch, the fact is that oil production has increased under Obama.

Halliburton's consolidated revenue in the first quarter of 2011 was $5.3 billion, compared to $3.8 billion in the first quarter of 2010. Consolidated operating income was $814 million in the first quarter of 2011, compared to $449 million in the first quarter of 2010. These increases were attributable to increased activity in United States land, as the unabated shift to unconventional oil and liquids-rich basins more than offset geopolitical issues in North Africa and the ongoing effects of the suspension of deepwater activity in the Gulf of Mexico.

"I am extremely pleased with our Q1 results, as overall revenue in the first quarter set a company record of $5.3 billion. North America delivered strong performance as margins progressed due to increased activity while Eastern Hemisphere operating income was significantly impacted by geopolitical events in North Africa, delays in Iraq, and typical seasonality," said Dave Lesar, chairman, president and chief executive officer. [Emphasis added.]

Obama talks about green energy, but is fundamentally pro-oil to a greater extent than his environmentalist friends find comfortable and his political detractors admit. He has called for expanded domestic oil production, but he continues to receive criticism for his supposedly "long ... record of locking-up America’s energy resources."